January 25, 1999
Web posted at: 8:47 p.m. EST (0147 GMT)

NEW YORK (CNNfn) - In a move to appease concerns raised by privacy groups, Intel Corp. Monday said it would change the way its next-generation Pentium III chips would implement individual serial numbers designed to verify individual users' identities.

Last week, Santa Clara, Calif.-based Intel (INTC) said it will include new security features on its upcoming Pentium III chips. The company said a unique serial number on each chip would help boost the security of online transactions.

Intel had previously said it will include a software feature that will enable users to turn off the ID feature. But Junkbusters, a Green Brook, N.J.-based technology lobby group that led a boycott of the Pentium III chip, called that option "unreasonable," especially because the feature turns itself back on each time the computer is restarted.

Howard High, an Intel spokesman, said the company will change the way the Pentium III transmits serial numbers online. Users will have to turn the serial number feature on to execute electronic-commerce transactions instead of remembering to turn it off.

"This has been a fairly consistent concern, so we addressed those concerns," High said.

Jason Catlett, Junkbusters president, said the boycott remained in effect while the organizations reviewed the matter.

"Obviously, a default that doesn't transmit a serial number is better," he said. "I still have to see the technical details if there are any remaining risks."

Earlier Monday, Junkbusters, Electronic Privacy Information Center (EPIC) and Privacy International announced a boycott of the Pentium III, saying the chips will make it possible to track an individual's online activity without a user's knowledge.

Catlett called the new feature "toxic to privacy."

"It changes fundamentally the assumption people have that they are anonymous when their computers are connected to the Internet," he said, adding that non-invasive security measures are already in place to secure credit-card transactions online.

Intel's High said the company still intends to meet with Junkbusters and EPIC to address the groups' lingering concerns.

Intel shares inched up 3/16 to 129-1/16 in late trade.